Whether the explosion in cigar sales is attributable to "a backlash by '90s voluptuaries . . . shaking a stogie at 'this neo-puritan era of chiseled abs and pinched enjoyments,'" Reilly, supra, or to more traditional associations between cigar smoking and status and wealth,
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the current popularity of cigar smoking is undeniable. In New York alone, several new cigar bars have opened; before long, "every neighborhood will have a cigar lounge with humidors for rent." Another Cigar Lounge Opens, The New York Times, C2 (Jan. 29, 1997). Just last year two new books about cigars appeared, encouraging cigar neophytes to cultivate a more studied appreciation of cigars through the knowledge of the cigar connoisseurs featured in these books. It is amidst this popularity surge in cigar smoking that counterclaim plaintiff Davidoff brings its Lanham Act claim against JR Tobacco's advertisement based on the latter's advertising brochure for its own line of premium cigars, JR Alternatives. Davidoff has moved for summary judgment, and JR Tobacco has opposed this motion. For the reasons explained below, counterclaim plaintiff's motion is granted.

Plaintiff and counterclaim defendant is a mail-order cigar company. JR sells name brand cigars, JR private label cigars as well as JR Alternatives cigars. (Rothman Declaration executed March 11, 1996 ("Rothman Decl.") P 2). The President of JR Tobacco, Lewis Rothman, consulted a variety of prominent cigar manufacturers around the world in developing his line of premium cigars, JR Alternatives. Among the manufacturers he consulted are General Cigar Co., Inc., Matasa, and Villazon. (Rothman Decl. P 6). Although these names may be foreign to those uninitiated to the world of cigars, they figure among the most celebrated of South American cigar manufacturers, producing such world famous cigar brands as Macanudo, Partagas, Punch and Rey del Mundo. (Id.).

As Mr. Rothman explains, he chose over 175 of what he considered to be the best cigars of the world, organized them into groups of 25, grouping together those similar in size, shape, taste, origin and wrapper color. (Rothman Decl. P 15). According to Mr. Rothman, it is common practice in the cigar business to sell a single cigar under numerous labels at different prices. (Rothman Decl. P 9). After having sorted the cigars into groups, Mr. Rothman requested the manufacturers whom he had consulted to produce, under the JR Alternatives label, a single cigar for each of the 25 groups according to his specifications. (Rothman Decl. P 14).

Among the cigars imitated were the Macanudo line, purportedly the most popular premium brand of cigar sold in the United States. Mr. Rothman suggests that DAVIDOFF, AVO and THE GRIFFIN'S are simply copies of Macanudo cigars. (Rothman Decl. P 16).

Mr. Rothman assigned one JR Alternative cigar to each of the 25 groups based on similarity of size, shape, taste, origin and wrapper color. (Rothman Decl. P 15). In JR's promotional material, JR displays photos of the original name brand cigar it has aspired to imitate as well as its own alternative to this brand.

B. JR Tobacco's Promotional Material

JR promotes its premium cigars in a color brochure and a catalogue attached to the brochure. These materials are systematically included with mail-order purchases of nonpremium cigars from JR. Upon visiting a JR Tobacco store, one can request a brochure from the store clerk. (Rothman Decl. P 3). One can also obtain a brochure by calling JR and specifically requesting one, although as of December of 1996, because of a sharp increase in demand, JR was not accepting any new orders nor was it sending any brochures to new customers.

The cover of the brochure displays several well known cigar brands juxtaposed to one JR Alternative cigar. The first two pages of this glossy 31-page brochure feature a description of the current market for premium cigars as well as an explanation of how JR Alternatives are designed and manufactured. Davidoff bases its Lanham Act counterclaim on numerous statements contained in this explanation. Among the statements Davidoff claims are patently false are the underlined portions of the following excerpts from the brochure:

(1) As importers and local retailers have intensified their efforts to trade their clientele up to newer and more expensive "labels," we, at J*R have scoured the cigar producing world to bring you those same products at lower prices under our own "labels."

(3) J*R has gone to the most respected and reliable cigar manufacturers with impeccable credentials (the very people who produce the majority of the world's most famous cigar brands) and we've ordered MILLIONS of hand-made Jamaican, Dominican, and Honduran cigars.

(4) J*R had more than 175 of the most famous cigars in the world duplicated, as closely as possible, in size, shape, taste, origin, and wrapper color. You'll find we have a J*R Alternative to just about anything worth smoking -- at a fraction of the original price!

(5) All J*R Alternatives are packed 20 cigars per box regardless of how the original cigar we have duplicated is packed.

(6) The pictures shown are the actual size of the real cigars we have copied.

(Rothman Decl., Ex. A). All these statements appear in the first two pages of the brochure in a narrative explaining the "dramatic escalation of retail cigar prices" followed by a description of how the company went about creating JR Alternatives, subtitled "Here's what we've done." (Id.)

Davidoff also points to statements made within the body of the brochure to support its claim. Page 26 features JR's "Cuban Alternative Story," as well as four brands of Cuban cigars to which JR markets a series of Alternatives. After an historical preface recalling the trade embargo imposed in 1961 against Cuba and the subsequent scarcity of Cuban cigars in America, the brochure explains:

In early 1989, we gathered samples of many of the legendary Cuban brands and sent them to F. Palicio & Co., in Honduras. These samples were then disassembled by a team including Frank Llaneza, a world famous cigar manufacturer, Estello Padron, a Cuban expatriate master cigar maker, and John Oliva of Oliva Tobacco, who is one of the world's foremost authorities on tobacco leaf. These three set about to create tobacco blends which would duplicate the taste of the various famous Havanas, as well as the look of the wrappers characteristic to each brand. On the following pages you will see the results of their work . . . .

(Rothman Decl., Ex. A). Next to this narrative are photos of seven Cuban cigars manufactured by Bolivar, Cohiba, Davidoff and Diplomaticos. Finally, Davidoff also challenges the statements contained on the packaging label affixed on each fiberboard box of cigars:

Custom made for JR Tobacco by the world's oldest, largest and most prestigious manufacturers. Our fine cigars are painstakingly hand made to be comparable in size, shape, taste and blend to the famous brand shown above at a fraction of the original retail price.

(Rothman Decl., Ex. B). Together with the introductory language of the brochure, these are the statements upon which Davidoff bases its Lanham Act counterclaim.
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III. Standard Applicable to Motion for Summary Judgment

Under rule 56(c), "[a] motion for summary judgment may not be granted unless the court determines that there is no genuine issue of material fact to be tried and that the facts as to which there is no such issue warrant judgment for the moving party as a matter of law." Chambers v. TRM Copy Centers Corp., 43 F.3d 29, 36 (2d Cir. 1994); see Fed. R. Civ. P. 56(c). See generally Celotex Corp. v. Catrett, 477 U.S. 317, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986); Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986). An issue of fact is genuine when "a reasonable jury could return a verdict for the nonmoving party," and facts are material to the outcome of the particular litigation if application of the relevant substantive law requires their determination. Anderson, 477 U.S. at 248.

If the moving party meets its burden, the burden shifts to the nonmoving party to come forward with "affidavits, depositions, or other sworn evidence as permitted by Fed. R. Civ. P. 56, setting forth specific facts showing that there exists a genuine issue of material fact." Rule, 85 F.3d at 1011; accord Fed. R. Civ. P. 56(e); Rexnord Holdings, Inc. v. Bidermann, 21 F.3d 522, 525-26 (2d Cir. 1994). The nonmoving party must "do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita, 475 U.S. at 586. Instead, the nonmovant must "'come forward with enough evidence to support a jury verdict in its favor, and the motion will not be defeated merely . . . on the basis of conjecture or surmise.'" Trans Sport v. Starter Sportswear, 964 F.2d 186, 188 (2d Cir. 1992) (citation omitted).

"In ruling on a motion for summary judgment, the district court is required to draw all factual inferences in favor of, and take all factual assertions in the light most favorable to, the party opposing summary judgment." Id. ; accord Chambers, 43 F.3d at 36. "The function of the district court in considering the motion for summary judgment is not to resolve disputed issues of fact but only to determine whether there is a genuine issue to be tried." Rule, 85 F.3d at 1011. Accordingly, "assessments of credibility and choices between conflicting versions of the events are matters for the jury, not for the court on summary judgment." Id. Similarly, "any weighing of the evidence is the prerogative of the finder of fact." Id. "If, as to the issue on which summary judgment is sought, there is any evidence in the record from any source from which a reasonable inference could be drawn in favor of the nonmoving party, summary judgment is improper." Chambers, 43 F.3d at 37 (emphasis added).

To recover under the first of the two alternative theories of false advertising under the Lanham Act, plaintiff must demonstrate that an advertisement is literally false.
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Johnson & Johnson v. GAC International, Inc., 862 F.2d 975, 977 (2d Cir. 1988) (citing Coca-Cola Co. v. Tropicana Products, Inc., 690 F.2d 312, 317 (2d Cir. 1982)). In determining whether the text of an advertisement is literally false, I must consider the context of the advertisement. Avis v. Hertz, 782 F.2d 381, 385 (2d Cir. 1986) (reiterating the Supreme Court's invective against "the tyranny of literalness"); Vidal Sassoon v. Bristol-Myers Co., 661 F.2d 272, 276 (2d Cir. 1981) (stating that court must view the "entire mosaic" of the advertisement rather than "each tile separately") (citation omitted); American Home Products Corp. v. Abbott Laboratories, 522 F. Supp. 1035, 1040-45 (S.D.N.Y. 1981) (stating that court must consider context of advertisement in ascertaining its literal meaning). Determining just how much "text must yield to context," however, is an extremely difficult task -- one almost impossible to accomplish without succumbing to the pitfalls of deconstructionism or becoming mired in a debate over semeiotics. Avis, 782 F.2d at 385. I must look beyond the mere words within the text, yet I cannot consider the "commercial context, the defendant's prior advertising history, and the sophistication of the advertising audience." Johnson & Johnson* Merck v. Smithkline Beecham Corp., 960 F.2d 294, 298 (2d Cir. 1992) (citing as factors to be used in determining whether an advertisement is likely to mislead or confuse public, not to determine literal falsity). To reach that delicate balance between the literal text and the context of an advertisement, counterclaim defendants urge embracing as much context as it would require to disclaim the common meaning of the words used in their advertisements. To embrace this much context, however, would effectively blur the distinction between an advertisement that is literally false and one that, although true, is likely to mislead the consumer public.

I decline to consider as much context as counterclaim defendants urge. Instead, each challenged portion of JR Tobacco's advertisement will be scrutinized within a meaningful and reasonable context, including not only the entire sentence of each portion of challenged text but also the entire text and overall message of the brochure. In determining the correct approach to ascertaining whether JR Tobacco's advertisements are literally false, I rely in particular on a number of Lanham Act claims that have arisen in the context of comparative advertising.

Although Rothman states in his affidavit that "the original [cigar] is duplicated by the ALTERNATIVE, as 'closely as possible,' with respect to the five listed characteristics: 'size, shape, taste, origin, and wrapper color,'" (Rothman Aff., P 10), he contradicts this statement in other sworn testimony. Although JR argues that the reference to origin refers to the country of origin only, JR overlooks the effect of the modifying phrase "as closely as possible" on the claim. With respect to origin, to duplicate "as closely as possible" means that not only is JR aware of the country of origin of the tobacco, but, more specifically, that it is aware of and has attempted to duplicate the particular region and regional conditions under which the tobacco is harvested -- an aspect of the origin of the product that is integrally related to the quality of the product. In his deposition, Rothman explains that conditions vary within one country from season to season as well as from region to region and that these differences affect the characteristics of the tobacco. (Rothman Dep. at 197-99, 203). Therefore, even if JR had taken steps to ensure that its leaves were from the same country of origin as Davidoff's leaves, this alone would not suffice to verify a claim of having duplicated the cigars "as closely as possible" with respect to origin. Rothman made no effort to ascertain the origin of the tobaccos used in Davidoff cigars. (Rothman Dep. at 223, 415-22). Rothman concedes that the Alternatives are not purchased from the same factories that make genuine Davidoff cigars. (Rothman Dep. at 366). JR's Alternative to Davidoff's cigars, manufactured in the Dominican Republic, are made in Jamaica. (Rothman Dep. at 322, 442-43). Although the location of the rolling factory may be less significant than the precise origin of the tobacco leaves themselves, JR, by its own admissions, has duplicated neither.

The statement numbered two on page seven, supra, comprises the whole of group two. Statement number two is perhaps the boldest and most specific of any of the claims made in JR's brochure. JR states that "in many instances the cigars sold under the super premium label, the premium label, and the JR label, are the identical product." (Rothman Decl., Ex. A)

a. Context for Group Two

The appropriate context for this statement is the brochure as a whole. Rothman attempts to modify the meaning of this statement by claiming that it refers to JR private label cigars rather than JR Alternatives. (Rothman Decl., P 9). The statement appears, however, on the same page as and directly under a large bold-faced title announcing "Introducing . . . THE NEW ALTERNATIVES." Although statement two does not expressly refer to the Alternatives, "the Lanham Act encompasses more than blatant falsehoods. It embraces 'innuendo, indirect intimations, and ambiguous suggestions.'" Vidal Sassoon, 661 F.2d at 277 (citation omitted). The placement of the statement directly under this bold-faced title compels the conclusion that the statement refers only to JR private label cigars.

b. Veracity of the Statement

The record does reveal that in some instances JR has achieved a product identical to a premium or super premium cigar. (Rothman Dep. at 355-65). Rothman identified a handful of instances in which the super premium, premium and JR Alternative were in fact the same cigar. Rothman was unable, however, to identify any instances in which the original featured in the photograph and the JR Alternative represented the same product. (Rothman Dep. at 365-69). Considering the context of the second statement, the second statement is also literally false. Therefore, defendants' motion with respect to the second statement is granted.

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